Cyprus-Forum.com

[MickKnipfler]

Sorry guys, I didn't want to scour the whole site but in a nutshell, why is retirement in Cyprus so attractive? I gather ther is some kind of tax advantages?

[cannedmoose]

The tax regime on pensionable savings is supposed to be quite attractive, but are you really serious in asking this question?

The reason so many oldies go to Cyprus is for the climate. Would you rather be wrapped up in blankets on a frosty March evening watching Emmerdale or sitting on your veranda drinking zivania? (I know it can still be 'cold' in Cyprus in March, but I'm making a point here).

[MickKnipfler]

Of course I'm serious. I was just inquisitive to find out what the tax advantages were

[cannedmoose]

http://www.lowtax.net/lowtax/html/jcypetx.html

[Michael Coumas]

If my memory is as it should be Pensions from overseas are or were taxed at 5% on sums over cy£2000. But please take up to date advice on that. In addition Income taxwas nil to cy£10k, 20% to cy£15k, 25% to cy£20k & 30% on anything over cy£30k. Also the first cy£50k was exempt from 20% Capital Gains tax which you pay on your home too. It is exactly that, a capital gains tax no matter where the gain was. Please do not take this as gospel though. I have known a lot of people move to Cyprus from overseas and I think none of them actualy moved for the financial benefits. If I am not mistaken for example a UK pension will rise broadly in line with inflation if paid into Cyprus whereas the opposite is the case if a Cypriot pension is paid to someone in the uk, it does not rise with inflation and consequently erodes. If you are in the UK contact your local Jobcentre office & ask for the booklet on social security reciprocal arrangements with Cyprus.

[Svetlana]

There are huge tax advantages for a Brit moving to Cyprus, but if you come for that reason alone, you would be missing the point.

The income tax situation is as Michael points out; but there is a double advantage if you work here and are in receipt of a State or employment pension from overseas, that will be taxed separately:

An example:
Earned income in Cyprus £10,000 tax NIL
Overseas Pension £12,000 tax £500

Total income £22,000 Total tax £500!!
**********************************************************

If you are not employed in Cyprus, you may adopt the £10,000 alowance against your overseas pension tax liability, thus, in this case you would be no tax on a pension of up to £10,000

On CGT, I should add that the £50,000 Personal allownace does not apply until you have owned and LIVED in the property for 5 years, this obviously does not apply to non-residents. The normal allowance is £10,000 (annually index linked) or £20,000 if the property is registered in two names.

Lana

[MickKnipfler]

Thanks guys.

Perhaps I should explain that I am 46 now and have long ben thinking about retiring abroad. I have never been to Cyprus but adore Greece.

At the moment I'm only checking out the options. France and Spain have their advantages in that I can drive there but obviously any tax advantages in Cyprus need to be part of the equation.

I am on the verge of being made redundant in my current job and am weighing up the options. One of which is to go contracting. If I could pay a substantial proportion of my income into a pension tax free and then move to Cyprus and withdraw it at much lower tax rates, it may be worth considering. Do you have to be 60?

[Svetlana]

Hi Nick

You do not have to be 60 to retire here or take advantage of the pension taxation.

Advantages over Greece/France:

people drive on the left
90% of the population speak English


Lana

[MickKnipfler]

If I was "living" in Cyprus, would I have to actually be there? What I mean is that there are opportunities for me to take contract work somewhere else in Europe (not necessarally uk), live in rented accommodation and then return "home" to Cyprus every 2 or 3 weeks. If it was within the EEC, couls I then pay Cypriate tax?

[edz1]

Provided you're out of the UK for a full tax year and in EMPLOYMENT outside the UK for that period you won't be liable to UK tax on your income from the date you go.

If you have income in the UK it gets more interesting. However, it is possible to become 'stateless' for tax purposes if you plan it correctly.